For years, stablecoins have been marketed as crypto's breakthrough application for cross-border payments, promising near-instant transfers at a fraction of the cost charged by traditional remittance providers.
Sending USDC across a blockchain may indeed cost only a few cents but a new study from the Bank of Italy suggests that isn't what most people actually pay when they send money home.
In a mystery-shopping exercise spanning 10 international remittance corridors, researchers found that stablecoin-based transfers were not systematically cheaper than conventional money transfer operators once the full journey, from bank account to crypto wallet and back into local currency, was taken into account.
The study, published as Markets, Infrastructures and Payment Systems Paper No. 86, tracked transfers of 200 USDC from Italy to destinations including Argentina, Brazil, South Africa, the UAE and Japan.
End-to-end costs varied dramatically, ranging from roughly 0.3% to almost 9% of the value transferred depending on the corridor and service providers used. Settlement times also differed widely, from around 20 minutes where domestic instant payment systems supported withdrawals to as long as two business days when recipients relied on conventional bank transfers.
A central bank highlighting shortcoming in the promises that stablecoins may make is in some ways to be expected. Traditional financial (TradFi) institutions may have a vested interest in undermining adoption of stablecoins - digital tokens pegged to fiat currencies. Digital currencies and blockchain were designed to remove much of the need for intermediaries, such as central banks, after all.
The researchers did however find that blockchain itself was rarely the problem.
Network gas fees accounted for only a negligible share of the total cost. Instead, the largest expenses came before and after the on-chain transfer: converting euros into USDC, withdrawing funds into local currency, foreign exchange spreads and fees charged by exchanges and domestic banking networks.
The findings highlight what has become one of the industry's biggest blind spots.
Much of the marketing around stablecoin remittances focuses on the cost of transferring tokens across blockchain networks. On Layer-2 networks and newer blockchains, moving digital dollars can cost less than a cent.
But remittance users are not buying blockchain transactions — they are moving money between two bank accounts, often in different currencies.
That distinction matters because stablecoins only deliver their headline cost advantages when both sender and recipient remain inside the crypto ecosystem. If the recipient is happy to hold USDC, spend stablecoins directly or pay merchants that accept them, the blockchain transfer itself is remarkably cheap.
In the real world, however, most recipients ultimately need local currency to pay rent, buy groceries or settle utility bills. Every conversion between fiat and stablecoins introduces another intermediary — typically a centralized exchange, broker or payments provider, along with additional fees and foreign exchange markups.
Rather than eliminating middlemen entirely, today's stablecoin remittance market often replaces traditional correspondent banks with a different set of intermediaries.
That does not mean the technology has failed.
The Bank of Italy notes that stablecoins can reduce costs in specific corridors, while their always-on settlement and programmability remain meaningful advantages over legacy payment rails. The study simply argues those benefits do not yet translate into consistently cheaper remittances once the entire payment chain is considered.
The report also points toward what may ultimately unlock stablecoins' original promise. As regulated off-ramp providers proliferate under frameworks such as Europe's MiCA regime and domestic instant payment systems become more closely integrated with digital asset infrastructure, competitive pressure could narrow conversion fees. Even then, foreign exchange spreads are likely to remain an unavoidable component of international payments.
For now, the research suggests stablecoins have solved the problem of moving value across blockchains. The harder—and more expensive—challenge remains getting that value into the hands of someone who simply wants to spend it.